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Monday, 23 November 09
INDONESIA MINING RULE THREATENS INVESTMENT DRIVE
 A new Indonesian mining rule, limiting contract work that can be outsourced and favouring local players, is shaping up as a new blow to plans to boost mining investment in Southeast Asia's biggest economy.
The rule, attached to a mining law passed last year, presents an immediate challenge for new energy and mining minister Darwin Saleh, who was sworn in last month amid hopes that a new government could boost the resources sector.
The mining law, which replaced one issued 41 years ago, aims to squeeze more benefits from rich mineral reserves in Indonesia, the world's top exporter of tin and thermal coal and a key producer of zinc, copper, nickel and gold.
But Indonesia has seen little new foreign investment in metal mining in recent years and the energy and mining ministry's new rules seems likely to dampen enthusiasm among potential investors.
"It will increase costs for miners because they have to buy their own equipment and hire new people," said Priyo Pribadi Soemarno of the Indonesian Mining Association.
To contain costs, most mining firms in Indonesia, particularly coal firms, rely on contractors for work ranging from actual mining to stockpiling of minerals.
But the new regulation limits contractors to stripping away top soil and transporting mining products, while the miner itself has to extract minerals.
The move would encourage inefficiency and was out of step with global trends, said Soemarno, the executive director of the mining group. "Mining companies globally are trying to slim down their organisations," he said.
Former Mining and Energy Minister Purnomo Yusgiantoro signed the new regulation at the end of September.
His successor, a suprise pick in President Susilo Bambang Yudhoyono's cabinet last month, has not publicly commented on it and little is known of his policy stance.
Indonesia has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations.
Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp, but much of the investment was made decades ago.
Investment in mining, including coal and geothermal, rose to $1.65 billion in 2008 from $1 billion in 2004 but mostly came from existing miners rather than new entrants.
Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work.
Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market.
COAL MINERS TO SUFFER MOST
The new mining services rule limits miners' use of contractors, and when allowed to use one, they must give a local contractor first preference and need the energy ministry's permission to hire affiliates.
David Kiu, an analyst at Eurasia Group, said the new rule was mainly aimed at curtailing transfer pricing, a practice rife in Indonesian mining, by which firms in the same group sell to each other at artificial prices to avoid taxes.
The new regulation applies immediately to new mining projects but allows existing miners a term of three years to adjust.
The regulation will have a bigger impact on coal producers, since they tend to use mining contractors for nearly all their mining activities, some experts said.
PT Adaro Energy Tbk, Indonesia's largest coal miner by market value, and PT Berau Coal, the fifth-biggest by volume, currently outsource their entire mining activities.
Sacha Winzenried, a mining partner at PricewaterhouseCoopers Indonesia, said coal companies would have to do more themselves and weigh up local contractors over foreigners.
"This will result in increased expenditures on capital equipment," Winzenried said.
Miners whose affiliates carry out mining activities might need to restructure their businesses after the end of the exemption period, he added.
"It's either by merging the contract mining business with the mining company or transferring the assets, or selling-off the contract mining altogether," Winzenried said.
Companies are still assesing the cost impact, although rating agency Fitch said it did not see negative rating implications for firms it covers including PT Adaro Indonesia and PT Indika Energy Tbk
But an executive at a top coal firm, who declined to be identified, said the regulation would significantly increase the requirements for capital, possibly limiting expansion.
"By employing contractors, this limits the capital requirements for heavy equipment and therefore we can expand faster."
The Indonesian Mining Association fears mining investment could fall below $1 billion this year due to uncertainty over the new law, although the government has said investment from mining -- including geothermal -- could surpass $2 billion.
Last year, mining giant BHP Billiton scrapped a study to develop an integrated nickel project in eastern Indonesia and decided not to go ahead with a coal mine in Central Kalimantan. Tsingshan Mineral Company Ltd had scrapped a $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Wednesday, 04 November 09
BINANI HOPES TO BUY INDONESIAN COAL MINE IN 2-3 MONTHS
"We are still negotiating, but hope to conclude the deal in the next two to three months," Binani Cement Managing Director Vinod Juneja to ...
Tuesday, 03 November 09
CHINA TO BE NET COAL IMPORTER IN 2009
China is accelerating its importation of coal to cope with fallen output caused by the consolidation of small coalmines, and is likely to become a n ...
Monday, 02 November 09
RIO TINTO WARNS ON CHEAP MONGOLIAN COAL
The Age reported that, Mining giant Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could u ...
Monday, 02 November 09
ESSAR SEEKS COAL ASSETS IN SOUTH AFRICA
Paguntaka reported that, Essar Group plans to acquire coal assets in South Africa to help boost its power business in India. A senior executive of E ...
Sunday, 01 November 09
MINES REGULATION AMENDMENT BILL TO BE TABLED IN PARLIAMENT
Thaindia News reported that, A bill seeking to amend the Mines and Minerals Development Regulation Act, 1957, will be introduced in the winter sessi ...
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- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- ICICI Bank Limited - India
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